Quiz-summary
0 of 10 questions completed
Questions:
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
Information
Certdemy free practice questions
You have already completed the quiz before. Hence you can not start it again.
Quiz is loading...
You must sign in or sign up to start the quiz.
You have to finish following quiz, to start this quiz:
Results
0 of 10 questions answered correctly
Your time:
Time has elapsed
You have reached 0 of 0 points, (0)
Categories
- Not categorized 0%
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
- Answered
- Review
-
Question 1 of 10
1. Question
Trading authorisations can be obtained in which of the following ways?
I. Through a fiduciary court
II. Through a power of attorney
III. Through a limited trade authorisation document
IV. Through issuance of a trade custody certificateCorrect
Trading authorization is usually obtained in one of two ways: through a limited trade authorization document or through a power of attorney document.
Incorrect
Trading authorization is usually obtained in one of two ways: through a limited trade authorization document or through a power of attorney document.
-
Question 2 of 10
2. Question
Which of the following statements concerning prudent investing standard is false?
I. Prudent investing standards always result in high performance
II. Prudent investing standards do not always result in high performance.
III. Prudent investing standards always reach the goal of the investor
IV. Prudent investing standards require that the investments should be excessively volatileCorrect
Prudent investor standards require that an advisor in a fiduciary role behave as if the assets over which that advisor has responsibility were his or her own assets. These prudent standards insist that all aspects of the client’s needs should be considered and that the investments not be excessively volatile and prone to unreasonable amounts of risk. However, prudent investing standards do not always result in high performance or even reach the goal of the investor.
Incorrect
Prudent investor standards require that an advisor in a fiduciary role behave as if the assets over which that advisor has responsibility were his or her own assets. These prudent standards insist that all aspects of the client’s needs should be considered and that the investments not be excessively volatile and prone to unreasonable amounts of risk. However, prudent investing standards do not always result in high performance or even reach the goal of the investor.
-
Question 3 of 10
3. Question
Despite its legality, many view soft dollar arrangements as unethical because of which of the following?
I. Because the brokerage effectively pays money to the investment company
II. Because the investment company is effectively paying from the accounts of the clients
III. Because the money that the brokerage receives comes from the commissions they charge
IV. Because the brokerage is the only beneficiaryCorrect
Many view soft dollar arrangements as an ethical gray area because the investment company is effectively paying for services from the accounts of the clients because the money that the brokerage receives comes from the commissions they charge.
Incorrect
Many view soft dollar arrangements as an ethical gray area because the investment company is effectively paying for services from the accounts of the clients because the money that the brokerage receives comes from the commissions they charge.
-
Question 4 of 10
4. Question
Which of the following is not a suspicious activity tied to money laundering that should be reported?
I. When the transaction is intended to disguise illegal activity
II. When there is a huge amount of money involved in the transaction
III. When there is a requirement to engage in criminal activity in order to complete a requested transaction
IV. When there is more than one party involved in the transactionCorrect
The industry has identified four red flags that point to suspicious activity that should be reported; If the broker-dealer knows that money involved in the transaction is the result of criminal activity or that the transaction is intended to disguise illegal activity, the transaction must be reported; If the broker-dealer would be required to engage in criminal activity in order to complete a requested transaction, it must be reported; If the broker-dealer is aware that the purpose of the transaction is to circumvent the provisions of the Bank Secrecy Act, the transaction must be reported; The last red flag requires the broker-dealer to consider the purpose that will be served by the transaction. If the broker-dealer cannot identify a legitimate purpose for a particular transaction based on available facts, the transaction should be reported as suspicious.
Incorrect
The industry has identified four red flags that point to suspicious activity that should be reported; If the broker-dealer knows that money involved in the transaction is the result of criminal activity or that the transaction is intended to disguise illegal activity, the transaction must be reported; If the broker-dealer would be required to engage in criminal activity in order to complete a requested transaction, it must be reported; If the broker-dealer is aware that the purpose of the transaction is to circumvent the provisions of the Bank Secrecy Act, the transaction must be reported; The last red flag requires the broker-dealer to consider the purpose that will be served by the transaction. If the broker-dealer cannot identify a legitimate purpose for a particular transaction based on available facts, the transaction should be reported as suspicious.
-
Question 5 of 10
5. Question
Which of the following measures are not a included in business continuity and disaster recovery planning?
I. Availability of backup data
II. Alternative communication for a firm
III. Alternate means to give customers access to their securities
IV. Backup location for workCorrect
Plans for a significant disrupting event must be in writing, approved by a principal, and include several preventive measures, such as the availability of backup data, alternative communication for a firm with its regulators, customers, and employees, a backup location for employees to work, and a means by which to give customers access to their securities in case of a disaster.
Incorrect
Plans for a significant disrupting event must be in writing, approved by a principal, and include several preventive measures, such as the availability of backup data, alternative communication for a firm with its regulators, customers, and employees, a backup location for employees to work, and a means by which to give customers access to their securities in case of a disaster.
-
Question 6 of 10
6. Question
Concerning Qualified domestic relations orders (QDROs), the following statements are true except:
I. A QDRO ensures that the account holder would be liable for the taxes, while passing on the portion of his retirement account.
II. If an accountholder were simply to distribute a portion of his retirement account to his ex-spouse, the accountholder would still be liable for the taxes.
III. The most ordinary QDRO allotment is 50% of the total increase in the retirement plan’s assets from the retirement plan’s assets inception to the point of divorce.
IV. The most ordinary QDRO allotment is 50% of the total increase in the retirement plan’s assets from the marriage’s inception to the point of divorce.Correct
The most ordinary QDRO allotment is 50% of the total increase in the retirement plan’s assets from the marriage’s inception to the point of divorce. QDROs are important because they also shift tax liability. If an accountholder were simply to distribute a portion of his retirement account to his ex-spouse, the accountholder would still be liable for the taxes, but a QDRO ensures that the ex-spouse would be liable.
Incorrect
The most ordinary QDRO allotment is 50% of the total increase in the retirement plan’s assets from the marriage’s inception to the point of divorce. QDROs are important because they also shift tax liability. If an accountholder were simply to distribute a portion of his retirement account to his ex-spouse, the accountholder would still be liable for the taxes, but a QDRO ensures that the ex-spouse would be liable.
-
Question 7 of 10
7. Question
Which of the following is true about the difference between current bid and current offer?
I. It effectively imposes a substantial premium on all transaction.
II. It does not affect the final trading price
III. It is called the spread, or markup.
IV. It exists so that the dealer may make money for services provided.Correct
The difference between the two is called the spread, or markup. The spread exists so that the dealer may make money for services provided. This affects the final trading price by effectively imposing a small premium on each transaction.
Incorrect
The difference between the two is called the spread, or markup. The spread exists so that the dealer may make money for services provided. This affects the final trading price by effectively imposing a small premium on each transaction.
-
Question 8 of 10
8. Question
Regarding Trade as a principal and as a trade, which of the following statements is / are true?
I. A trader acting on behalf of himself / herself is known as a principal.
II. A principal or dealer’s profit motive is satisfied by the commission he or she earns as a result of the sale and through fees charged.
III. Principals act on their own behalf; agents act on the behalf of others.
IV. A broker’s profit motive is satisfied by the commission he or she earns as a result of the sale and through fees charged.Correct
*A principal or dealer’s profit motive is satisfied by the capital gains and trading fees he or she may acquire due to the transactions between the principal and the principal’s clients.
*A broker’s profit motive is satisfied by the commission he or she earns as a result of the sale and through fees charged.Incorrect
*A principal or dealer’s profit motive is satisfied by the capital gains and trading fees he or she may acquire due to the transactions between the principal and the principal’s clients.
*A broker’s profit motive is satisfied by the commission he or she earns as a result of the sale and through fees charged. -
Question 9 of 10
9. Question
The following are advantages of High-frequency trading (HFT), except:
I. It processes high quantities of orders and transactions at extremely fast speeds.
II. It removes the human element of practical judgment from stock trading.
III. It replaces smaller traders, given the economic advantages such trading confers on the larger companies who can afford to implement HFT.
IV. It utilizes algorithms to compile and apply data from several different markets and to assess market conditions.Correct
Such trading utilizes algorithms to compile and apply data from several different markets and to assess market conditions. Although HFT systems have been acknowledged to improve market liquidity, such systems have received criticism for removing the human element of practical judgment from stock trading and for crowding out smaller traders given the economic advantages such trading confers on the larger companies who can afford to implement HFT.
Incorrect
Such trading utilizes algorithms to compile and apply data from several different markets and to assess market conditions. Although HFT systems have been acknowledged to improve market liquidity, such systems have received criticism for removing the human element of practical judgment from stock trading and for crowding out smaller traders given the economic advantages such trading confers on the larger companies who can afford to implement HFT.
-
Question 10 of 10
10. Question
Listed below, are functions carried out by a specialist in securities trading, except?
I. He/shecompletes transactions for other persons and transacts business for him/herself.
II. He/she also facilitates trading by determining prices of the stock for which they make the market.
III. He/she executes orders placed with limits and trades in general.
IV. He/she possesses inventories of that stock to sell in the absence of a selling investor or orders that are too large to fill based on the amount currently for sell by individual investors.Correct
*They also execute orders placed with limits and trades in general. Generally, it is the role of specialists to wait in reserve to fill or receive orders of their given securities to guarantee a stable and fair market.
*Specialists possess inventories of that stock to sell in the absence of a selling investor or orders that are too large to fill based on the amount currently for sell by individual investors.
*Specialists also facilitate trading by posting the bid and ask prices of the stock for which they make the market.Incorrect
*They also execute orders placed with limits and trades in general. Generally, it is the role of specialists to wait in reserve to fill or receive orders of their given securities to guarantee a stable and fair market.
*Specialists possess inventories of that stock to sell in the absence of a selling investor or orders that are too large to fill based on the amount currently for sell by individual investors.
*Specialists also facilitate trading by posting the bid and ask prices of the stock for which they make the market.